IDEAS home Printed from https://ideas.repec.org/a/aes/amfeco/v11y2009i26p364-373.html
   My bibliography  Save this article

Operational Risk Assesement Tools for Quality Management in Banking Services

Author

Listed:
  • Alina Mihaela Dima

    () (The Bucharest Academy of Economic Studies, Romania)

Abstract

Among all the different types of risks that can affect financial companies, the operational risk can be the most devastating and the most difficult to anticipate. The management of operational risk is a key component of financial and risk management discipline that drives net income results, 2capital management and customer satisfaction. The present paper contains a statistical analysis in order to determine the number of operational errors as quality based services determinants, depending on the number of transactions performed at the branch unit level. Regression model applied to a sample of 418 branches of a major Romanian bank is used to guide the decision taken by the bank, consistent with its priorities of minimizing the risk and enlarging the customer base ensuring high quality services. The analyisis reveals that the model can predict the quality of the transactions based on the number of operational errors. Under Basel II, this could be a very helpful instrument for banks in order to adjust the capital requirement to the losses due to operational errors, predicted by the model.

Suggested Citation

  • Alina Mihaela Dima, 2009. "Operational Risk Assesement Tools for Quality Management in Banking Services," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 11(26), pages 364-372, June.
  • Handle: RePEc:aes:amfeco:v:11:y:2009:i:26:p:364-373
    as

    Download full text from publisher

    File URL: http://www.amfiteatrueconomic.ro/temp/Article_877.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Carolyn Currie, 2006. "A Test Of The Strategic Effect Of Basel Ii Operational Risk Requirements On Banks," The IUP Journal of Monetary Economics, IUP Publications, vol. 0(4), pages 6-28, November.
    2. Carolyn Currie, 2004. "Basel II and Operational Risk - Overview of Key Concerns," Working Paper Series 134, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    3. Galindo, J & Tamayo, P, 2000. "Credit Risk Assessment Using Statistical and Machine Learning: Basic Methodology and Risk Modeling Applications," Computational Economics, Springer;Society for Computational Economics, vol. 15(1-2), pages 107-143, April.
    4. Kenneth Daniels & Gabriel Ramirez, 2008. "Information, Credit Risk, Lender Specialization and Loan Pricing: Evidence from the DIP Financing Market," Journal of Financial Services Research, Springer;Western Finance Association, vol. 34(1), pages 35-59, August.
    5. Healy, Paul M. & Palepu, Krishna G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 405-440, September.
    6. Robert Hauswald & Robert Marquez, 2006. "Competition and Strategic Information Acquisition in Credit Markets," Review of Financial Studies, Society for Financial Studies, vol. 19(3), pages 967-1000.
    7. Simon Kwan & Robert Eisenbeis, 1997. "Bank Risk, Capitalization, and Operating Efficiency," Journal of Financial Services Research, Springer;Western Finance Association, vol. 12(2), pages 117-131, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nicolae Dardac & Petronel Chiriac & Bogdan Moinescu, 2012. "The Use of Internal Rating Models in Managing the Risks Related to the Exposures of Non-banking Financial Institutions," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 14(31), pages 258-271, February.
    2. Vergil Voineagu & Simona Nicoleta Vasilache & Daniela Şerban & Silvia Elena Cristache & Liviu Stelian Begu, 2016. "An Analysis of the Romanian E-Commerce Trade Trends in European Perspective," ECONOMIC COMPUTATION AND ECONOMIC CYBERNETICS STUDIES AND RESEARCH, Faculty of Economic Cybernetics, Statistics and Informatics, vol. 50(1), pages 235-252.
    3. Semenescu Andreea & Curmei Cătălin Valeriu, 2015. "Using CSR to mitigate information asymmetry in the banking sector," Management & Marketing, De Gruyter Open, vol. 10(4), pages 316-329, December.

    More about this item

    Keywords

    quality management; operational risk; banking services; binary regression model;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aes:amfeco:v:11:y:2009:i:26:p:364-373. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valentin Dumitru). General contact details of provider: http://edirc.repec.org/data/aseeero.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.